Out With the Old and In With the New

By Charles S. Clark

August 1, 2013

In January, 300 Washington-area property developers arrived at the General Services Administration’s headquarters for an Industry Day presentation, to compete for the opportunity to build the next FBI headquarters.

Waiting impatiently through delays at the metal detectors, several expressed irritation at the badge-wearing GSA employees who cheerfully skipped the line.

“Why would the terrorists care? They’re just a bunch of clerks,” one businessman said.

Such condescension toward federal employees is not unusual, especially at an agency tarnished by scandal over lavish spending at a 2010 training conference. “It’s simply part of being a public servant,” says Dan Tangherlini, now in his second year at GSA’s helm. “That’s been a popular view, but the federal workforce I know are the people who fight in Iraq and Afghanistan, the Coast Guard members who dive to help sinking ships, who work for cures for cancer, who protect the border and prevent planes from smashing into each other.”

In his experience, feds are “really smart people with a mission and a calling, which is the reason I’m still a public servant,” Tangherlini says. The FBI Industry Day, for example, “was a creative and thoughtful approach, a new angle in partnering with the private sector,” he adds. “If the FBI performs its work at the highest level, it will only make the country a better place.”

Such upbeat precision is a Tangherlini hallmark.

When the 45-year-old was tapped to rescue GSA in April 2012, he brought a sterling public sector resume: the Treasury Department’s assistant chief financial officer, administrator and deputy mayor for the District of Columbia (where he also was transportation department chief and chief financial officer for the police department) and interim general manager of the Washington Metropolitan Area Transit Authority.

When GSA Administrator Martha Johnson was forced to resign amid fallout from the $820,000 GSA Public Buildings Service Western Regions Conference in Las Vegas, Tangherlini was tapped to restore trust.

He hopes to go one better. After nearly a year as GSA’s acting administrator, President Obama nominated him in May for the permanent post, and in late June the Senate confirmed him. “Trying to run the government like a business was used as an excuse to support the Western Regions Conference,” he says. His goal now is to “clarify what we’re doing to support the workforce and measure performance with data-driven outcomes.”

With his new leadership team, Tangherlini embarked on an exhausting speaking schedule—35 appearances on Capitol Hill and at industry conferences. His prepared spiel describes a top-to-bottom review of GSA management and spending practices, a Great Ideas Hunt to inspire employee-suggested innovations, promotion of GSA’s efforts to leverage federal agencies’ purchasing power through strategic sourcing, and a shortened mission statement.

The results show in areas such as GSA’s effort to shrink the federal building footprint. More than 100 properties are moving through the disposal process, with high-profile deals that include selling the 64-year-old Georgetown Heating Plant in northwest Washington, leasing the Old Post Office on Pennsylvania Avenue to Donald Trump’s hotel company, and selling an Army ammunition depot outside Minneapolis.

Tangherlini also weaned GSA executives from bonuses not easily defended in a time of austerity, cutting them agencywide by 64 percent.

But skepticism persists. In an April audit, GSA’s inspector general, Brian Miller, found the agency lacked universal financial software and was using manual workarounds. And a June IG report on GSA acquisition said the agency had “undermined the integrity of the procurement process” when managers overruled underlings and altered contracts with major software firms.

Meanwhile, House Republican committee chairmen show no signs of letting up on bashing GSA, citing waste at conferences and bureaucratic delays in property sales they characterize as “sitting on our assets.”

Tangherlini is first to admit there is more to be done. “The hardest thing in an organization like this is to get the bad news to the boss,” he says. “There are things he really needs to know as concerns can turn into issues, which turn into problems, which turn in to scandal. We want to get at them at the concern level.”

THE BULLPEN

The renovation of GSA’s headquarters building in Washington was planned as the embodiment of the agency’s quest for a new modus operandi. The building, originally completed in 1917 for the Interior Department, features a sixth-floor administrative suite that includes perhaps the fanciest office in government—a high-ceilinged, wood-paneled retreat offering a spectacular view of the monuments on the National Mall. Tangherlini has slated it not for himself but for ceremonies, training sessions and loaning to other agencies.

Nearby is a handsome dining room in which the Harding administration reportedly cooked up the corrupt oil-leasing scandal known as Teapot Dome in the early 1920s.

Tangherlini’s unremarkable office space is a 120-square-foot open-air cubicle, the first in a row arranged in the bullpen style made famous by New York City Mayor Michael Bloomberg. Tangherlini’s predecessor, Martha Johnson, used a similar arrangement.

Glass-enclosed rooms off to the side are available for private conversations and phone calls. More important, Tangherlini says, the commissioners of the Public Buildings Service and the Federal Acquisition Service have desks just steps away. “We erase physical boundaries because we don’t need geography that reinforces hierarchy,” he says.

Conference tables to one side mean that all employees—even those from out of town who book space—can overhear meetings. While the bullpen is “an adjustment for everyone, it creates an opportunity for informal, unplanned interactions,” Tangherlini explains. It helps GSA “do a better job in integrating the way we acquire buildings, put in information technology and leverage GSA schedules for our agency partners.”

What all of Tangherlini’s jobs have in common, he says, is “making agency operations perform at the highest level.” At Treasury, he cut his teeth on resource allocation, improving executive reporting and setting continuous performance measures to drive better outcomes—all during the 2009 global economic crisis. Similarly, his stints at Metro and the D.C. government came at a time of “crisis situation Tand emergent issues,” he says, adding cheerfully that with each new job came less salary and more work.

At the top of GSA, Tangherlini is the most accountable. “It’s up to me to make operational calls, whereas before I presented information to the leadership team,” he says. “There are customers and organization charts north of me, including Congress. This hierarchy complexity is what makes these jobs interesting and challenging and, frankly, often frustrating. When you’re dealing with public money, any decision should be thoughtful and withstand strict scrutiny.”

BAD BLOOD?

On arrival at GSA, Tangherlini had to deal with raw feelings from the conference scandal—12,500 employees feeling tarred by the actions of a few. Some believed that upon his arrival, Tangherlini enabled a witch hunt that ended the careers of talented and long-serving employees. He is unwilling to discuss those who departed, saying, “I didn’t know those people.” Tangherlini says he has a solid working relationship with Deputy Administrator Susan Brita, the former congressional oversight staffer who tipped off GSA’s inspector general to the over-the-top conference.

“Susan is an indispensable part of the team. She’s a strong ethical actor who served as a role model for ‘if you see something, say something,’ ” he says. “Do we agree 100 percent? We have a yin and yang view of the world. If I say I like information technology, she reminds me of history and process and the structure of the law.”

One of Tangherlini’s unpleasant tasks was to end annual awards for top administrators. “We called a meeting and said if you’re not happy with that, we can help you find a different place within GSA or on the outside,” he recalls. “It’s testimony to our team that no one left.”

He then cut bonuses for the Senior Executive Service pool by 85 percent. “It’s not at zero, and it’s still important to recognize people with some worthy kind of award,” he says. “We haven’t completely eliminated bonuses, just put them in two major categories,” one for SES and the other for everyone else. Previously there were 15, and the portion of people getting additional compensation was 90 percent. Tangherlini also ended the “shared stores” at which GSA employees who earned points for good work could redeem them for iPods and cameras.

“At that point, I don’t think you’re rewarding behavior but shifting to a compensation program,” he says, adding that at some level the practice undermines federal policy. “It sounds like Management 101, but [with pay and bonuses] you have to start by looking at the mission. It’s amazing how few organizations have actually mastered that continual process.”

Tangherlini says he’s surprised there are not more incidents of overspending in government, though he insists he’s not trying to rationalize the Las Vegas conference. “The vast majority of federal employees are truly and deeply sensitive to their responsibility, and we’re all judged by mistakes made along the way,” he says. “At GSA we try to be the kind of learning organization that recognizes when we make mistakes and own the mistake and make sure we don’t do it again. That first step is hard—for all agencies.”

THE LONG TERM

At a field hearing in April at a vacant federal warehouse near the Washington Navy Yard, Rep. John Mica, R-Fla., hammered GSA for “a pattern of not being able to make decisions” in unloading idle government-owned properties.

His colleague on the House Transportation and Infrastructure Committee, Rep. Jeff Denham, R-Calif., has gone further, declaring at a 2012 procurement conference that GSA should be abolished. “I know it can sound harsh,” Denham said. “I think it’s more important for them to come back and justify: What does this agency do? What are its core competencies? Are there other agencies that can pick up some of those duties? More important: Can private industry do it better?”

Tangherlini notes he takes “a global view, from 30,000 feet.” If it weren’t for his experience working on the D.C. City Council, “I would be much more sensitive,” he says. “But the Founding Fathers hit on a brilliant model, and we do have tensions between the branches of government with which they’re holding us endlessly to account.” If lawmakers at hearings tossed GSA people “easy questions and told us we are doing a great job, it probably wouldn’t be in the best interest of taxpayers,” Tangherlini adds.

House and Senate chairmen “ask us tough questions because we’re spending billions of taxpayer dollars,” he says. But he adds, “It’s also politics. The trick is not to take it personally. I don’t enjoy having to go to a hearing in an empty office space, but we should make sure the building isn’t empty anymore and try to keep one step ahead.”

One area where GSA has room to grow is in overcoming resistance across government to buying goods and services through the GSA Schedules, which has left the agency with only a 16 percent share of federal procurement. The result, Tangherlini says, is loss of savings opportunities from pooling government’s collective buying power. He has raised the issue with many departments at the deputy secretary level, telling them “what they’re leaving on the table by not aggregating.”

“Oftentimes people need to convince people in the agencies to let us do it, and it can be a hard sell,” he says. “There’s a natural tendency to vertically integrate.” But going back to the first Hoover Commission on government reform that predated GSA’s birth in 1949, it’s been clear from the business world that the economies of scale are not there for single agencies. “Buying from GSA is not outsourcing,” he stresses. “We’re another agency whose sole purpose is to find those services that are done in common that benefit from scale and then drive down costs.”

Tangherlini came into office neutral on whether there is a need for a GSA. He thought back to the 1980s when the agency had a monopoly on providing services. But now that it is forced to compete in a competitive marketplace, the revolution in information technology and the current budget crunch “are forcing the pendulum to swing back toward more cooperation and coordination,” he says. “It puts us in a strong position to reacquaint agencies, to show them that going through a transition makes us a better business partner.”

Abolishing GSA would be unwise, he says. “It’s probably never been more important to the federal government than right now.”